Board of Directorsand Committees

of the Bank

127 Board of Directors129 Management Committee131 Monetary Policy Committee133 Financial Stability Executive Committee135 Shariah Advisory Council137 Financial Stability Committee

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Datuk Chin Kwai Yoong

Chairman, Board Audit

Committee

Member, Board Governance

Committee

Tan Sri Datuk Dr. Yusof bin Basiran

Member, Board Audit

Committee

Tan Sri Dato’ Seri Siti Norma binti Yaakob

Member, Board Governance

Committee

Dato Sri Lim Haw Kuang

Member, Board Risk

Committee

Dato’ Lee Yeow Chor

Member, Board Risk

Committee

Muhammad bin Ibrahim

Governor and Chairman

Tan Sri Dr. Mohd Irwan Serigar bin Abdullah

Secretary-General to

the Treasury

Dato’ N. Sadasivan a/l N.N. Pillay

Chairman, Board Risk

Committee

Member, Board Audit

Committee

Tan Sri Dato’ Sri Dr. Sulaiman bin Mahbob

Chairman, Board

Governance Committee

Member, Board Risk

Committee

Shaik Abdul Rasheed bin Abdul Ghaffour

Deputy Governor

Dr. Sukudhew Singh

Deputy Governor

The Board of Directors wishes to extend its appreciation and gratitude to Dr. Zeti Akhtar Aziz and Nor Shamsiah binti Mohd Yunus who completed their respective terms as Governor and Deputy Governor in April and November 2016.

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Management Committee

Adnan Zaylani bin Mohamad Zahid Assistant Governor

Norzila binti Abdul AzizAssistant Governor

Abu Hassan Alshari bin YahayaAssistant Governor

Dr. Sukudhew SinghDeputy Governor

Muhammad bin IbrahimGovernor

Shaik Abdul Rasheed bin Abdul Ghaff our Deputy Governor

Donald Joshua JaganathanAssistant Governor

Jessica Chew Cheng LianAssistant Governor

Mohd. Adhari bin Belal DinAssistant Governor

Members from left to right

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131Annual Report 2016

Monetary Policy Committee

Monetary policy is formulated independently by the Monetary Policy Committee based on a sound governance framework

The primary objective of monetary policy in Malaysia is to maintain price stability while giving due regard to developments in the economy. Under the Central Bank of Malaysia Act 2009 (CBA 2009), the Monetary Policy Committee (MPC) of Bank Negara Malaysia is charged with the responsibility of formulating monetary policy and the policies for the conduct of monetary policy operations1. In this regard, the MPC sets the policy interest rate, the Overnight Policy Rate (OPR), to influence other interest rates in the economy.

In carrying out this mandate, the MPC determines the direction of monetary policy based on its assessment of the balance of risks to the outlook for both domestic growth and inflation. The MPC also monitors risks of destabilising financial imbalances given their implications for the prospects of the economy. The Committee meets at least six times a year to decide on the OPR and publishes the Monetary Policy Statement (MPS) following each meeting to explain its decisions.

The MPC comprises the Governor, the Deputy Governors, and three to seven other members, including external members who are appointed by the Minister of Finance upon recommendation by the Bank’s Board Governance Committee. At present, the MPC has eight members, two of which are external members. The membership of the MPC is intended to bring together a diversity of expertise and experiences that is critical for sound decision-making on monetary policy.

Abu Hassan Alshari bin YahayaAssistant Governor

Prof. Dato’ Seri Dr. Noor Azlan bin GhazaliVice-Chancellor, Universiti Kebangsaan Malaysia

Dr. Sukudhew SinghDeputy Governor

Muhammad bin IbrahimGovernor and Chairman

Shaik Abdul Rasheed bin Abdul Ghaffour Deputy Governor

Prof. Dr. Yeah Kim LengProfessor of Economics, Sunway University Business School, Sunway University

Norzila binti Abdul AzizAssistant Governor

Adnan Zaylani bin Mohamad Zahid Assistant Governor

Members from left to right

1 For a detailed account of the evolution of the MPC, and its governance and processes, refer to the ‘Box Article: Evolution of the Monetary Policy Committee of Bank Negara Malaysia: Key Milestones over the Years’ in the Bank’s Annual Report 2015.

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Financial Stability Executive Committee

The Financial Stability Executive Committee (Executive Committee) was established in 2010 pursuant to Section 37 of the CBA 2009. Its primary purpose is to contribute to the fulfilment of the Bank’s statutory mandate of preserving financial stability through its decision making role in specific policy measures proposed by the Bank. These measures which are formulated for purposes of averting or reducing risks to financial stability are:

• TheissuanceoforderstoapersonorfinancialinstitutionthatisnotsupervisedbytheBanktoundertakespecificmeasures;

• TheextensionofliquidityassistancetoafinancialinstitutionthatisnotsupervisedbytheBank,ortooverseasoperations of a licensed financial institution in Malaysia; and

• Theprovisionofcapitalsupporttoanon-viablelicensedfinancialinstitutioninMalaysia.

The Executive Committee serves to strengthen the accountability framework for the exercise of the broad financial stability powers accorded to the Bank under the CBA 2009. It acts to ensure that proposed measures within its purview are appropriate, sound and comprehensive to address identified systemic risks. The Executive Committee meets at least twice a year. Additional meetings can be convened at any time if deemed necessary in the interest of financial stability. The Executive Committee consists of seven members, a majority of whom must be non-executive members who are independent of the Bank’s Management. Members are subject to the Executive Committee’s Code of Ethics and Conflict of Interest, which seeks to preserve the integrity of decision making and enhance public confidence in the objectivity, independence and high standards of conduct of the Executive Committee.

In order to contain the excessive growth in household indebtedness, the Executive Committee in 2013 deliberated on and approved the extension of requirements aimed at reinforcing responsible lending practices to major household credit providers not supervised by the Bank. Since the extension of the measures, growth in household loans from non-bank credit providers has moderated to more sustainable levels, supported by improvements in underwriting practices of these institutions.

Financial Stability Executive Committee

Yoong Sin Min

External Expert

Muhammad bin Ibrahim

Governor and Chairman

Jean Pierre Sabourin

Chief Executive Officer of Perbadanan Insurans Deposit Malaysia

Tan Sri Dr. Mohd Irwan Serigar bin AbdullahSecretary-General to the Treasury

Datuk Johan bin Idris

External Expert

Tan Sri Dato’ Seri Ranjit Ajit SinghChairman of Securities Commission Malaysia

Shaik Abdul Rasheed bin Abdul Ghaffour

Deputy Governor

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Burhanuddin bin Lukman Researcher, International Shariah Research Academy for Islamic Finance (ISRA)

Associate Prof. Dr. Asmadi bin Mohamed Naim Associate Professor, Islamic Business School, Universiti Utara Malaysia

Tan Sri Sheikh Ghazali bin Abdul RahmanShariah Legal Advisor, Attorney General Chambers

Dato’ A. Aziz bin A. Rahim Former Judge, Court of Appeal Malaysia

Prof. Dr. Ashraf bin Md. Hashim (Deputy Chairman) Chief Executive Officer, ISRA Consultancy

Datuk Dr. Mohd Daud Bakar (Chairman) Founder and Executive Chairman, Amanie Group

Sahibus Samahah Datuk Dr. Zulkifli bin Mohamad Al-Bakri Mufti of Wilayah Persekutuan

Prof. Dr. Mohamad Akram bin Laldin Executive Director, ISRA

Dr. Shamsiah binti Mohamad Senior Researcher, ISRA

Prof. Dr. Engku Rabiah Adawiah binti Engku Ali Professor, IIUM Institute of Islamic Banking and Finance (IIiBF), International Islamic University Malaysia (IIUM)

Members from left to right

Shariah Advisory Council

Shariah Advisory Council

The Shariah Advisory Council of Bank Negara Malaysia (SAC) was established in May 1997 as the highest Shariah authority in Islamic banking and takaful in Malaysia. In the CBA 2009, the roles and functions of the SAC were further reinforced as the authority for the ascertainment of Islamic law for the purposes of Islamic financial activities which are supervised and regulated by the Bank.

The SAC assumes a pivotal role in ensuring the consistency of Shariah rulings applied in the Islamic banking and takaful industry. The Shariah rulings by the SAC serve as a main reference for Islamic financial institutions to ensure end-to-end Shariah compliance in the structure and implementation of their financial products and services. In addition, the CBA 2009 provides that any queries on Shariah matters in a court or arbitration proceeding must be referred to the SAC, whose opinions shall be binding.

The SAC provides the Shariah basis for the development of a comprehensive Shariah contract-based regulatory framework for Islamic banking and takaful in Malaysia. In this regard, the SAC defines the essential features of the contracts taking into consideration the various Shariah views, research findings, as well as custom and market practices. Moving forward, the SAC, through its members, individually and collectively, will expand its sphere of influence to support more product innovation and encourage harmonisation of Shariah interpretation locally and globally.

The appointment of the SAC members is made upon approval by the Yang di-Pertuan Agong, on the advice of the Minister of Finance after consultation with the Bank. Currently, the SAC has ten (10) members consisting of prominent Shariah scholars, jurists and legal experts.

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Financial Stability Committee

The Financial Stability Committee (FSC) is a high-level internal forum responsible for discussing risks to financial stability stemming from both system-wide and institutional developments (as defined in Section 29 of the CBA 2009 and, where necessary, making decisions on policy responses to avert or reduce risks to financial stability. The FSC meets to:

• Deliberateanddecideontheappropriateresponsestosystemicrisks;

• Deliberateanddecideonmicrosurveillanceresponsesandactionsincludingresolutionmeasurestoaddressrisksto financial stability and decisions on the non-viability of Bank Negara Malaysia-regulated institutions;

• MakerecommendationstotheFinancialStabilityExecutiveCommitteeontheappropriateresolutionmeasuresfordistressed institutions, in accordance with Section 38 CBA 2009; and

• MonitortheimplementationofapprovedpolicyresponsesandotheractionsasdirectedbytheFSCandtheFinancial Stability Executive Committee.

The FSC is chaired by the Governor and membership comprises all Deputy Governors and Assistant Governors for regulation, supervision, treasury operations and payment systems. The meeting is also attended by selected senior officers of the Bank.

Since 2010, the FSC has deliberated on several macroprudential policies (e.g. maximum loan-to-value ratios and measures on responsible financing) to address issues such as the high household indebtedness and speculative behaviour in the property market. The implementation of these measures along with other policy responses, has contributed towards moderating growth in both household debt levels and residential property prices.

Financial Stability Committee

Adnan Zaylani bin Mohamad Zahid

Assistant Governor

Muhammad bin Ibrahim

Governor and Chairman

Dr. Sukudhew Singh

Deputy Governor

Donald Joshua Jaganathan

Assistant Governor

Jessica Chew Cheng Lian

Assistant Governor

Shaik Abdul Rasheed bin Abdul Ghaffour

Deputy Governor